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Gecina CEO: Market won't accept polluting buildings anymore

Buildings that are not designed to maximize energy efficiency and limit their environmental impact have become unacceptable to the market, Meka Brunel, CEO of Europe's largest listed office landlord Gecina said at the MIPIM property conference in Cannes, France.

SNL ImageThe Circular Economy panel at the MIPIM property conference in Cannes, France.
Source: S&P Global Market Intelligence

Speaking during a March 15 panel discussion, Brunel said that a two-tier market existed 10 years ago, with energy-efficient buildings that had environmental certifications charging higher rents while more-polluting buildings had lower rents. This situation no longer exists, she said, as tenants are now unwilling to occupy polluting buildings even at a discount.

"Nobody accepts [polluting buildings] today," Brunel said. "[Buildings] where there is asbestos, where the energy consumption is inefficient, where you don't have all the [highest] standards in terms of quality of life, nobody accepts them even if you pay them."

"If you are not [ensuring that your properties are environmentally friendly] you are not going to get a customer or a client. Ultimately you are going to create vacancies," she said.

Gecina has a program to reduce its carbon impact by 2020, and this year it achieved its target of making all its office buildings carbon-neutral, Brunel said. Offices make up 80% of Gecina's real estate portfolio. Gecina is part of a pan-European think tank, initiated by Brunel, aimed at developing and sharing ideas on sustainability and innovation. The think tank also includes the U.K.'s Great Portland Estates PLC, Germany's alstria office REIT-AG, Italy's COIMA RES SpA SIIQ, Spain's Inmobiliaria Colonial SOCIMI SA, and the Netherlands' NSI NV.

Returns need not be impacted by the investment required to deliver environmentally friendly buildings, Brunel said, so long as environmental design considerations are a priority at the outset. "I bet that the cost difference is not going to be huge if you are doing it at the beginning of [your] thinking," she said. "So I don't believe the returns are going to be hurt by this concept."